Go-ahead for 'free' cash machines in deprived areas

Non-charging cash machines will be installed in low income areas around the UK following a "ground-breaking" deal struck by banks, operators and the Treasury.

The ATM working group said that more than 600 machines would be found homes in socially deprived locations in a bid to improve financial inclusion.

In addition, fee-charging operators will be forced to place signs prominently on their machines to ensure that it is "crystal clear" to customers that they will be charged.

The working group was set up by the Treasury to examine ways to improve access to "free" machines in low income areas.

People in socially deprived areas often find that their nearest machines charge an average £1.50 for withdrawal, with some machines charging as much as £3.

Of the 58,000 cash machines in the UK, 40 per cent charge a fee and it is the poorest areas that are hardest hit through lack of free machines, research from Citizens Advice has shown.

To combat the problem, the working group has announced that a "financial inclusion premium" has been built into the rules of the UK LINK ATM network.

Under the initiative, banks and building societies will pay a premium on interchange fees - which are paid to cash machine providers -to operators who run free machines in lower income areas.

John McFall, chair of the working group, said: "This is a huge step forward in the campaign for financial inclusion.

"The banks, building societies and cash machine operators who have worked with us on this plan deserve to be congratulated for their constructive and innovative work, which will mean a huge expansion in access to free cash machines for people in low income areas, vital for economic activity in those areas."

A number of sites have already been identified for the new machines, while consultation on other locations are under way.

Ed Balls, Economic Secretary to the Treasury, hailed the deal as a breakthrough in efforts to help people in lower income areas to start up bank accounts.

He added: "Today's agreement will extend free access to cash to those who need it most and enable all customers to distinguish immediately between charging and non-charging machines."

Operators will have to install prominently-placed, large type signage above and on the screen of every fee-charging machine, the working group said.

The national charity Citizen's Advice said it welcomed today's announcement.

Teresa Perchard, director of policy at Citizens Advice, said: "Introducing standardised and clear information on machines that do charge fees is very good and something we called for after our survey showed that many people didn't know they were being charged for withdrawal.

"Customers must know exactly how much they are paying when taking out money."